Skip to main content

tv   Power Lunch  CNBC  February 10, 2010 12:00pm-2:00pm EST

12:00 pm
12:01 pm
good afternoon, everyone. and welcome to "power lunch." i'm tyler matheson. the bulls are shivering. it says, shivering, its buns off. weather, there it is. oh! there's the bull's booty. all right. weather wreaking hoff ok, havoc
12:02 pm
must be wreaked with the northeast, but luckily not with the markets off their lows earlier today and business and leisure air travel hampered across the board. >> can you tell it took ty a while to get in on the weather this morning. welcome, everybody. i'm sue herera. china playing by its own rules. will that force multinationals to stop playing with china and in china altogether? >> i'm michelle caruso-cabrera. i spy with my corporate eye. we go inside the secret world of corporate espionage, think cia guys on your payroll. >> i'm dennis kneale. how did toyota lose its way? this is one of the best carmakers in the world. we'll look at that and here's what else is on the menu. >> i'm hampton pearson live at reagan national airport, one of three washington-area airports shut down by the blizzard. it's only getting worse. philadelphia's closed and there's a ripple effect to new york and boston. ? i'm diana olick in washington.
12:03 pm
the double dip in housing we've all been waiting for, it may officially be here. a new report on home prices and under water equity coming up. >> all righty. diane a thanks very much. as we watch this unfolding action in the markets today as the debt crisis in greece continues to move along there and the possibility of some solutions being found led by germany and the eu, let's now go to bertha coombs on the floor of the big board to interpret it all for us. you lead it off, bertha. >> thanks very much, tyler. i was talking with allen valdez coming down and he said as much as the snow is holding down volume so is the uncertain owe greece and it's certainly been pinging the dollar up and down. take a look at the dollar versus the s&p and that's dictated much of our direction as people watch how things are moving overseas. meantime, that's left financials strong and it's left commodities weak for the most part. we've had in the steel sector in
12:04 pm
particular and this is a sector that's continuing to be hard hit today after bhp billi iton had cautious things to say about its outlook. as far as energy overall, exxon and chevron also getting hit as oil gets hit on the stronger dollar. massey energy is on j.p. morgan on valuation and with all of this snow, the consumer names and some of the retailers are under pressure because people can't get out. tyler, i think you have breaking news. i'll send it right back to you. >> let's go to phil lebeau who has spoken with a toyota executive on those recall problems plaguing that big automaker, phil? >> tyler, we had a chance to catch up with bob carter, vice president for north america of toyota and they had a presentation here at the chicago auto show and we had a chance to talk to them about the status of the sticky pedals and where are they in fixing them and more importantly about ending the questions that continue to swirl that this is not the worst of everything, that toyota still has more information it has not
12:05 pm
revealed and let's hear what he had to say. >> i don't have an answer for you, phil, because quite frankly the way we're treating this is it's not a relevant concern of ours. we have a couple of mechanical situations that we've got to address with our customers. we built this franchise on quality for 50 years. we haven't met the expectations over the last two months. that's where our energies are. i'm extremely pleased that our dealer organization across the nation has acted so quickly to already repair over 225,000 vehicles and at a rate of about 50,000 vehicles a day. we'll take care of the customer first and then the financial impact will figure that out after we're completed. >> what might you say to the american public who might be out there and saying toyota is not quick enough, it hasn't gone far enough and frankly, i'm not convinced that this is something that the company is not telling us. what do you say to those people?
12:06 pm
we will have to reprove by our actions. a couple of these mechanical issues such as the stishgy accelerator pedal is a very, very difficult situation to discover and determine what was going on. what i can tell you is it was a very rare occurrence and it was an occurrence that happened slowly over time. once we've identified the problem now our focus is to get the repairs initiated with our consumers as soon as possible. that was singularly the reason why we closed production last week. when we understood that we had a certain number of our accelerator pedals demonstrating they were slightly stick in rare instances in a period of time and we did not have enough parts in our service parts system. we shut down production exclusively so i could take the parts from the factory line, and get them to our dealership to begin repairing consumers' cars.
12:07 pm
>> one last thing. for those people who are out there and you hear these questions all of the time, we think there's an electrical problem. toyota says there's not, but we think there's an electrical problem, even federal investigators did not know there was an electrical problem. can you say electronics were not the problem with unintended acceleration? >> yes. yes. >> we have spent years developing these and exhaustibly testing them. we have companies outside of toyota that is independently testing them and have tested them in the past and are externally testing them today. we have no indication whatsoever that anything can happen that would even indicate that that could potentially cause unintended acceleration. through this testing, we've found two mechanical issues and first with the floormat entanglement and as we were going through that process we found a handful, and it was only
12:08 pm
a handful of accelerator pedals that were slow to return. >> but you're willing to share that documentation, the testing on the electronics with federal investigators? >> absolutely. we're fully cooperating with nhtsa. >> there you have it. bob carter, vice president of toyota, once again, stating what the company has said for more than a week that electronics played no role and play no role in accelerator pedals sticking. guys, they're going share that information with the federal investigators who are looking into this. they have still not come to their own conclusions, by the way. that congressional hearing that's supposed to take place today that will happen and you can bet the electronics question is definitely going to be coming up. >> one would think. >> thank you very much, phil. we will talk more about toyota in just a short while and the implications of what phil just discussed as well as the road map looks ahead for the automaker. let's get to the market reporters. we have a pullback in some of the indices today. mike huckman is down at the
12:09 pm
nasdaq. how does it look down there? >> sue, the nasdaq was the only one of the two major indices that was higher so far in february, but unfortunately not anymore. before i get to the earnings and upgrade stock stories here at the nasdaq today. i did want to show you that google is not moving at all on the news that jim goldman broke that the company will venture into ultrahigh-speed broadband and shares of the top competitor in china, baidu up 8 1/2% today, and also on stronger-than-expected earnings. open up almost 20%. millicom, the emerging market cell phone company up 6% and two upgrades to a buy for dell and adobe systems at bank of america and jefferies respectively. those stocks up 1.5%, identical raises for both. let's go down to the timeec. >> commodities trading in the copper pits and the crude oil
12:10 pm
pits and they're all watching the s&p 500 and they're watching the dollar and that is impacting where commodity prices are right now. we are looking at lower prices acrossed board. keep in mind we are off the lows of the session as the dollar continues to gain ground above the 80 level and the s&p 500 is off of its lows of the session. when you look at what's happened to the dollar that gives a good picture of what is happening to commodities, but also look in terms of oil as what has happened to gasoline and the fact that we're looking at low gasoline demand and a build in inventories and the petroleum institute weighing on the front and that part of the sector. keep in mind the inventory report will come out at 11:00 a.m. friday due to weather delay. rick santelli, to you in chicago. >> thank you very much, sharon. we're not getting as much volatility today as yesterday although ben bernanke's tax did get a little movement. if you look at two-year yield it's slightly elevated and you look at the curve it's know changed. there's a potential for an exit strategy as depicted by that
12:11 pm
text. if you look at the next chart, indeed the euro versus the dollar has been mostly down, but it is bouncing back a bit especially in the last hour or so, keeping up with the headlines and some of those headlines, hey, the checks didn't have a good day and they sold an additional 150 million u.s. equivalent of their 15 year. they wanted to sell more, but portugal had better luck selling u.s. equipment of the 4 billion of ten-year note and let's hop across the pond and rebecca me ham. >> let's take a check of what's happening in europe and it's all about greece. no surprise there and we check on the fotse, the cac and the dax. 2.4% higher for greek eiquities today. we know we've had the european finance chiefsi having a conference call today. the ecb governing body is having a call tonight and tomorrow an eu summit of the leaders of
12:12 pm
these european countries, not just gains in athen, gains in other peripheral european countries that have been struggling economically resently. check out spain and portugal, we're seeing gains in all of these regions. back to you. >> the head of the european central bank jean-paul trichet heading to brussels. as reports conflict on the bailout package for greece, carolina cimeni is live in brussels with the latest. >> before trichet leaves frankfurt to come to brussels, he'll be holding a conference call with the central bank governing council and that is coming as rebecca just mentioned the finance minister's conference call this afternoon. the euro zone finance minister's conference call and just a couple of minutes ago, the chairman of the euro zone has announced tomorrow during this european summit he will be talking to other european leads
12:13 pm
are preenting the euro zone plan to help greece. he didn't use the bailout word, of course, because there are other stories going on here in brussels saying that maybe, it's not exactly a bailout. maybe it will be something like the european state banks buying greek bonds to give the greek government more time to work on their reforms, they need to, do for example, cutting pensions and so on. back to you. >> cutting wages and i don't know, with the protests that we've seen, carolina, it will be very tough. thank you. the major indices right now hovering around the 10,000 level when it comes to the dow approaching it from the other side. art nunez is with ims capital management and joe hider is principal with rain mern. joe, let me start with you, what do you make of what we've seen in the market as of late? is this because of greece where we see now greek workers protesting today and striking or is this a needed correction in
12:14 pm
what will continue to be a bull market? joe. >> i believe it's a little of both. i think it is a needed correction, and we do think it's a correction inside of a bull market. greece, i believe, is just a little bit of a triggering event to help that correction along. it appears that the european central banks are going to find a way to help greece out through this crisis, although it does show with the protests going on there's a disconnect between what the public wants in greece and what the government may have to do. >> your thoughts are that people need to reduce your portfolio risk right now. you're watching the 200-day moving average, why and what should they be doing? >> exactly. investors should be reducing the risk fright now because risky assets such as stocks and bonds are in a correction right now and we don't know how low that correction's going go, so we think what they should be doing is examining their portfolios and selling their
12:15 pm
underperforming assets such as international stocks and commodities, increasing their buying power so that they have buying power once the market stabilizes to invest in the stronger areas in the market. >> that is your position, right? you think this is a correction and eventually we turn? >> yes, absolutely. so long as the recovery in the economic data and corporate profits continue to recover which we think they will at this point and a good model to examine the longer term trends of the stock market has been the 200-day moving average. we have our eye on that which is 5% under current levels. >> joe, if this is a correct, have we corrected or how much farther do you bet we have to go down? >> we don't think it will go down all that much more. we think the downside risk might be a few hundred points and there's greater opportunity to the upside. so we think we're looking at approximately 10% in cash right now for buying opportunities, but we're not recommending a massive pullback in equities. >> art, why would i want to sell
12:16 pm
my underperforming assets and not my overperforming ones? >> because in the market, tyler, trends persist. trends have priced trends and trend with underperformance. if you have something going up in price and underperforming it will continue doing that until it doesn't, right? >> you want to trim your portfolio to things that are not performing well so you can then reinvest in the outperforming assets later on. >> if those are the ones that have gone up the most might they be the most overextended and therefore the most risky in a market pullback? possibly, but we need to look for the market for clues and monitor those trends on a daily basis and they'll keep going up until they don't and we have to monitor them. >> can we bring up the protest video? they're on strike in gueies today. one in three workers in greece works for the government and some of the austerity measures that they're trying to put in place, they'll have to work until you're 63 and you'll have
12:17 pm
to take a wage freeze. >> it's a different way of life and one that many people are very used to and want to protect. it's interesting, i was mentioning earlier that there are a lot of countries that want to enter into the eu and it might harder for them to do if they don't have good financials because if there's a bailout for greece -- who's next? >> workers protesting about budget cuts at a time when the country is in crisis, it could be a future shot of america given all of the government hiring we're doing at all levels. >> california already is like that. >> yeah. allies of the bureaucrats with the elected official against the taxpayers that have to pay for those employee pensions. >> i'm not worried about it. >> good. >> i'm not. >> i'm worried about the snow, guys, paralyzing theest. >>. the latest on snowmageddon or snowmg as they call it after the break. >> the fear factor, china getting turowed put four rio tinto workers on trial. that probably means prison time for them so why is china flexing its muscles against the west and
12:18 pm
should businesses there be worried? plus a five-star international fund manager. he's investing in greece right now. one of his big holdings is there and ask him if he'll keep putting his $5 million to work in the country. we have a sharp eye on that. matt, what are you hunting for this hour? >> you were to spend $775 million you'd want a little something, a little bang for your buck. coming up in a little bit i will tell you this company that spent the money and is having a 10% pop in the market. "power lunch" is back in two. whh
12:19 pm
12:20 pm
12:21 pm
i'm meteorologist mike seidel. welcome back to "power lunch." boy, we're getting powered by a storm in washington. blizzard conditions continue until 7:00. we've had snow and blowing snow so far, 20810 inches and it's deepening off the east coast, new york, philadelphia and cape cod, look out for the wind and snow to ramp up this afternoon and evening, and this is what i'm talking about. this is not syracuse, new york. this is not buffalo. this is not marquette, michigan, in is the nation's capital and dennis, we have not seen the capital for roughly an eighth of a mile all morning long. an inch an hour and some of the wind gusts have been as high as 60 miles an hour. it will be rough travel right on into tomorrow. back to you. >> oh, my gosh. >> thanks for that hail and
12:22 pm
hearty report. i admire that guy greatly. >> the snow is causing cancellations across the entire board for business and leisure air travelers alike. hampton pearson is at the reagan national airport outside of cash washington, d.c., in virginia. >> here at dulles and marshall, and bwi, all three major washington area airports shut down by the record snowstorm. what does a shut down airport look like? take a look. first of all, outside there are simply no planes at the gates. the snowplows continue to work in these near-blizzard conditions and the departure areas and curb side areas all deserted, ditto for airline ticket counters and inside as well as security checkpoints. the picture looks pretty much the same up the eastern seaboard with cancellations and limited service in airports in philadelphia and beyond. so far today airline stocks have been trading down after registering their biggest one-day gains yesterday.
12:23 pm
one analyst i talked to says mid-week storms like this one basically are a bigger hit for the airlines because passengers and especially business air travelers will tend to cancel entire trips, not necessarily rebook them. also latest updated information on other modes of travel and other airports and amtrak is running acela trains in the northeast corridor which is open from here to new york on to boston, the new york area airport's open, but very little flight traffic, if you will. dennis? >> thanks very much, hampton. we'll move on to the next thing, right, guys? >> we have a lot on our plate. next we have the five-star rating, $5 billion in the kitty and top "money magazine's kwrt "foreign fund. and he'll tell you where he's putting all those clams to work. >> let's take a look at a few stocks hitting new 52-week highs this morning. sara lee trading up almost 2%, highest since october 2008 and
12:24 pm
burlington northern. that stock hasn't seen those levels since september of 2008. it is up just a frack, but at 99.93. we are back in a moment on "power lunch" with the dow down 30. seeing if we have enough points to stay longer. now? you don't have enough time... and you have to push all those buttons... no buttons, someone answers every time. yeah, right... bet you a massage... yeah, ok. hi, julie... i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire... you call. we answer. no waiting. just press right here... go to chase what matters.
12:25 pm
this is not more benefits at greater cost to your company insurance. this is not how does it fit in my company's budget insurance. this is help protect and care for your employees at no cost to your company insurance. with aflac, your employees pay only for the coverage they want or need. and, the cost to you - nothing at all. if all you know about us is... aflac! ...then you don't know quack. to find out why more businesses provide aflac, visit
12:26 pm
12:27 pm
with all of the concerns of greece and sovereign debt where should global investors put their money. lead portfolio manager of the scout. the fund is up 40% over the last year and it has been named the top foreign fund. >> thank you. happy to be here. >> whether or not the best value can be found domestically here at home given the pullback we've seen or whether the international arena is still the place to be. if you think the greece situation is manageable, is the pullback that we're seeing in some of these foreign markets, specifically in europe, is opportunity being created there? we think so. one of the variables in there is currenciet and fear factor has gone up which is what you see in a correction like this and we do think this is a correction, then the currency of the dollar has gone up and the euro's gone down. we think that that will unwind
12:28 pm
once we get over the hump on this correction. every correction has something that triggered it. in this case it's worried about grooek a greek and mediterranean debt in general. >> you have a big stake there in greece, coca-cola bottling, cch? >> that's one of our largest holdings and it's the second largest coke bother in the world ask we own it not because it's greek. we own it because it has bottling operations from europe to moscow. >> and you're holding it right now despite the crisis or are you adding to it? it's gotten hit in the last couple of months maybe because of what's going on in greece. >> it got whacked several months ago and it's basically gone flat in the last month or so and it's like the second best stock on the athens stock exchange. of course, that's relative, but it still has held up very well or its earnings come from outside of athens. >> right. >> we think it's an attractive
12:29 pm
situation. it's a 12 times earnings or something like that for a coke bother. that looks reasonable. >> in the minute we have left, you find parts of asia intriguing including japan and what would it take to get you to commit cash to japan at this point? the things that we're looking at in japan is one that the japanese economy is doing reasonably well and the market isn't that the stocks are getting cheaper and the other is a subtle shift on the part of the government to encourage a weaker yen and this will, in turn, help their exports and we think that those two ingredients make japan relatively more attractive. we're still under weight and we've usually been under weight in japan, but we think we're looking more favorably on japan at this point. you know, it's something that's out of favor. >> jim, thank you very much. appreciate it. >> straight ahead, we take a trip beyond the big caps with matt nesto.
12:30 pm
we have a stock little held that's up 90% since the bottom. >> i would love to have some of that. >> china putting four rio tint on workers on trial for bribery and stealing business secrets. justified action or yet another reason to fear the dictatorship in beijing. that debate when "power lunch" returns. ne awaits the return of the fishing boats. ♪ their safe arrival is highly anticipated, ♪ as is something else. a shipment of natural sea salt from cargill, essential for preserving the catch. we deliver the salt on precise schedules... and ship it efficiently all along the alaskan coast; saving the fishermen money, and their catch. this is how cargill works with customers.
12:31 pm
12:32 pm
12:33 pm
welcome back, everyone. the dow has turned positive, dit oat s&p just by a little bit. here's the headlines that the hour. j.p. morgan chase leading those dow stocks right now. the bankshares up 2% and more than doubling since march lows. wyndham worldwide is the top performer on the s&p, gaining about 5%. we will talk to that giant ceo later on "power lunch" here first on cnbc. widening to a surprising $42 billion in december, fueled by higher oil prices and that number much higher than the $36 billion deficit economists expected. dennis? >> we'll toss to goldman, did you say? >> yes, he did. go to jim goldman. breaking news, go ahead. >> just a quick update for you now on the google plan, the broadband plan that we just
12:34 pm
talked about 15 minutes ago. this is the high-speed plan that google is going to be offering a test bed, if you will, for as many as 500,000 people across the united states and offering broadband service to the home up to 100 times faster and we have a statement from the fcc chairman about all of this. google is in contact with the fcc and is looking for cooperation along these lines and the fcc chairman says, quote, big broadband creates big opportunities and this significant trial will provide an american test bed for the next generation of innovative, high-speed internet apps, devices and services. the fcc's national broadband plan will build upon private sector initiatives and will include recommendations for facilitating and accelerating greater investment in broadband, creating jobs and increasing america's global competitiveness. remember, the fcc is in the midst of trying to put togetherst own national broadband plan and private sector advances and innovations
12:35 pm
are obviously very key to expanding all kinds of broadband and bandwidth and it's a huge issue when you talk to the likes of at&t, verizon and comcast. >> thank you, jim goldman. >> just one quick thing. google created the issue of net neutrality at the fcc. the thought that verizon shareholders paid for the network, but the fcc should be able to come and tell verizon you're not allowed to charge for a big, fat load of traffic from, say, a rival. now google wants to operate one of the fiber optic networks and google will face demand from rivals to put big, fat traffic and the fcc will say google, you're not allowed to charge for that, it stands whether they'll have changes in the net debate. >> big trucks pay more when they go through tolls compared to little cars. >> to a debate off your radar and off the chart. >> perkin el more riding 0% since the march lows and here with the breakdown on what the buzz is about is rob hopkins.
12:36 pm
rob, good to see you. i know this is a medical device maker and explain more, what does perk in elmer do? >> they like to be considered a life science tools company with the medical sector and they make tools for bench research as well as for industries now, and they have two major divisions. the first one is human health where they're the largest player in neonatal and prenatal screening which is important in the u.s., but it's becoming much more important across the world and even in developing countries as they become more middle class and then second, they are a big player in environmental health and they do everything from security systems to stuff dealing with food safety. >> why is it up 0% since the march lows and would you recommend it here? >> almost recommending it here. they're up 0% since the march lows because they're the most
12:37 pm
levered or the most exposure to the general business cycle of these life science toolmakers which are considered more stable names tied to health care, but since they have more toward the regular business cycle, they fell the furthest and what's happened here, a lot of speculators have gotten in it and they've been jumping up in value and have risen as people believe aye the recovery's in sight. >> quick interview on perkin-elmer as we go off the charts and to less widely known names. the fear factor from beijing. executions trialing and cracking down on outsiders. is china ready to thumb its nose at the west? a debate on the other side of the break.
12:38 pm
"s" stands for straightforward. as in up-front, honest... total transparency. straightforward is the way td ameritrade does business. simple, fair pricing. no hidden account fees. no shenanigans. just good value. real help. smart people who are easy to work with. that's what td ameritrade stands for. what does your investment firm stand for? it's time for fresh thinking. it's time for td ameritrade. withsun life financialng should be famous.d bad, we're working on it. so you're seriously proposing we change our name to sun life valley? do we still get to go skiing? (announcer) sooner or later, you'll know our name.
12:39 pm
sun life financial.
12:40 pm
china indicting four employees of the mining giant rio tinto on charges of bribery and stealing state secrets. the news sending a shudder through big business. should americans be afraid to do business in china? dennis is a partner and does a lot of business over there and peter navarro is a university of california business professor and cnbc contributor. dennis, this would strike an awful lot of americans as a pot ketel kind of thing. they're accusing our people or
12:41 pm
western businesses of stealing trade secrets? it doesn't strike me that way at all. i think that the chinese are finally beginning to face up to the fact that there is corruption everywhere and the chinese have really been going after corruption since hu gin that o the current leader came in about six years ago. they put a vice governor to death and they shot some of the people who were involved in the tainted milk. so the fact that we have a trial on this is not too much of a surprise to me at this point. >> peter, is this more than dennis suggests, a clampdown on corruption rather than sort of a s.w.a.t. at western business? >> well, dennis does do business in china. i think he's arc trade of getting arrested. that's the show trials. basically, the big question here, i think, is whether american executives should be afraid of going to china. i think the answer's yes. the big risk we've had in the past is the loss of technology and intellectual property and it happens in a couple of ways.
12:42 pm
if you go over there, tyler, right off the bat you have to give them your technology. gm and intel have learned that lesson the hard way and there are all sorts of industrial espionage as well. the second thing is you've got geopolitical risk and the small geopolitical risk is the retaliatory terrorists that a company like tyson foods in china can experience when obama imposes things like tariffs. the bigger one that has come into the future is when we square off with china or whether it's taiwan or iran or some other kind of issue. that's a big risk for the market going down. >> let me jump in. that's really interesting, but if the chinese really want toed retaliate against the west all they have to do is take the $800 billion that they're holding in t-bills right now or not buy any at all or buy half of them. >> let dennis finish his point, peter. to say that this is the way the chinese are coming back against
12:43 pm
the west, i don't agree with that. here's the point, if these guys are involved in corruption, and if they were involved here, we would froms cute them as they are. if they're not involved in corruption then the chinese would have to do a public trial. to say this is just an anti-west move and there's nothing more to it, i think is ridiculous. >> dennis, peter, thank you very much. we have to move along. we'll have you back soon to continue this discussion. michelle? >> tyler at the top of the hour when "power lunch" comes back you'll meet the ceo of a company whose stock is up 600% since the bottom. hedge funds, bank, corporate spies and cia agents. it sounds like a novel, but it's not, it's real. an inside look at the world of businesses ponnage, but first, bob pisani and the "fast money halftime report" coming up.
12:44 pm
12:45 pm
12:46 pm
welcome to the fast money halftime report, getting to the heart of the action as the happening. the dow shrugging off an 80-point decline and he might take the punch bowl away and it bounces back to life. the fast money halftime crew and the ambassador tim seymour, jared levy from pick six and brian kelly from conundrum capital and brian nations. let me start with you, a nice
12:47 pm
little turnaround here. the stocks rebounded and the euro rebounded. what do you think is going on here? >> so this is more about the game plan and looking at the fed policy going forward, and i think it took the market a little time to adjust to that and taking the dollar some time to adjust to that. i think we're now actually starting to get some comments and there's going to be an ecb council meeting going on now at teleconference ahead of the brussels summit tomorrow. people believe we'll get more good news and the dollar's given up ground and the market's rallying. >> we saw the financials rallying in the last hour or so and the dow went positive here. is this a global credit crisis relief story now? is that the way to start looking at this? >> i think you're just looking at a relief rally. there's been an awful lot of news over the last couple of days that have caused people to sell off and we're just looking here and maybe we get something out of greece and maybe that financials will do better. if you look at the bernanke
12:48 pm
statement, there's nothing new in that, but if they'll get paid more interest on the reserves maybe they'll make more money and i think that's what's going on here. >> let's move on and talk about the big story of the day and that's the whole commodity market and what's going on? i want to bring in joe teranova on "the fast money" line. let's talk about what we saw initially, joe. alcoa, freeport and the commodity names moving to the down side, but in the last half hour or 45 minutes oui seen the dollar weaken and the commodity names mick a bit of a comeback here. what do you think? >> here's the chance if you want to get out of some of these names to do some selling or you play these as a tradable item, and i think that's exactly what you do. in oil, futures themselves, was there rather good buying once you got below 73 bucks and you rallied a dollar and a quarter off that low. i think oil is the one commodity that you don't want to play from the short side and oil and energy, i think you have to stay long with it. you're big oh merging market commodity names and what do you think is going on right now?
12:49 pm
>> yo's pointing out, we've had a huge move back and we talked about this 15% to 20% in some of the biggest commodity players in the world. mattel reported today that they guided that the first quarter would be very difficult because input prices for steel companies and ore and coal are going higher. bhp which also just reported and reported late yesterday, that's very good for some of the integrated miners. owe bhp, the value reports after the bell and these are names you should be looking at because they pulled back dramatically and let's not forget about china. china announced export and imports this morning. the imports are better than expected and the exports are weaker and the china's story's not changing and their demand for cooking coal and oil. bhp and mattel and steel companies may have problems because little going up. >> valley is focused on the european market and the u.s. market and the south american market. they have a tougher time in china and the bottom line is
12:50 pm
iron ore prices are rising all over the world. this is despite the hesitant comments they made this morning over at bhp. this is very good news for this group. >> yeah. absolutely it's good news that we are starting to see prices jump a little bit, but it is also good for the broader market, though that the normal relationships are back. the fact that the higher dollar is sometimes with gold, i think the fact that we're back to normal is a good thing. >> jared, you're big in a totally different area right now. you're looking at orange juice and what's been going on in the commodity names in the united states, tell us what you think is happening there. several things i want to point out. number one, i believe the whole market is trading a lot on technicals. the fluctuations are manifestations of traders in motion. right now especially in orange juice you're seeing a pennant formation in the short term not to mention you've had nasty temperatures down south and you've also had some diseases down there, the green disease they've been talking about. the bottom line is orange juice has been bid up and i think moving forward in the summer o.j. prices will come in.
12:51 pm
i'm also watching natural gas and we saw a big roll of calls and it's making a bullish bet out to may. i will note that in the near-term, moving into the long-term for the fed, it's caught a bid and if you look back at '07 and '08 that seems to be the time it seems to rise. >> how can our viewers actually take advantage of that and how will they buy orange juice futures? if anything they would be selling it. you could sell upside call spreads or you can buy downside puts in orange juice. again, understand that trading futures involves a little bit more knowledge and it's more risky than trading a regular stock. >> mosaic a little bit. similar space in the commodity area. $53. that was the resistance level. where are we at now? >> a little bit above that. they presented at a goldman conference today and presented a pretty bullish story for the global fertilizer industry as a
12:52 pm
whole. it's a restocking story. it's been about two years since inventories have been replenished. farmers are lanting a little bit more corn and prices rising in the phosphate and potash area. >> go ahead, i'm sorry. >> there's really good points in mosaic. we saw upside call action in mosaic, a call spread. he's right. demand is all across. if you look at live cattle too, it costs more to feed these cattle. mosaic is going to benefit. along with archer daniels midland and conagra are the ones you want to look at. >> pick particular stocks. you can't get long beta in this environment. >> here's a market mystery for you. bernanke may raise the discount rate before long. a lot of big names are just on the verge of turning positive right now. what do you think, scott, what's going on here? >> first of all, there's nothing new here. the mechanism is what we have
12:53 pm
expected. the timing may have changed and may not have changed. he used every old euphemism for some time eventually that he could today. i think that the fact that financials are doing well says mr. bernanke thought they could handle this. that he doesn't see any underlying weakness. and while we sold off initially on the news, there was really no news there. we've obviously come back. i think this is kind of a backhanded show of support for the banks. >> don't you think. >> they hardly ever say anything anyway. number one, go ahead. >> don't you think this is good news, guys? mr. bernanke is saying we're being responsible getting out ahead of the game. greece is an issue. next the uk before or after portugal. u.s. is trying to get its house in order. why isn't thisç
12:54 pm
side. we talked about vm ware. the cloud computing space. that's where i would rather be. >> i think we started to see that the windows 7 cycle is not going to be the savior for microsoft and dell and some of these other names. so while we see a little bit of a jump in dell, nobody is going crazy filling out the blue side of the card. >> in the options world, there's big volatility there. we're seeing a lot of implied volatility. be careful. >> the fast and furious, your last chance to trade the stocks that have earnings out in the next 24 hours. brazilian miner valley out after the bell. what's your take. >> there's been strikes in the
12:55 pm
nickel mine in canada. they had some issues domestically. in the short term, i would say short. >> jared, marriott releasing ahead of the bell tomorrow. buy or sell? >> represent par is down but occupations are up. i'd be doing a 24/20 bull pit spread. i believe it stays above 24. that's my bet. >> pepsi out tomorrow morning, scott. what do you do with it. >> i like pepsi. they are going to talk about good news from international business. i think it's very unlikely they would miss that 91 cent number. >> brian, have to get you later. on tonight's "fast money," we take a oo closer look at bernanke's action. up next, "power lunch" talks to the ceo of windham worldwide. the halftime report continuous right after this. >> it's all greek to the markets these days as traders hope a bailout will save u.s. stocks.
12:56 pm
we'll tell you why this idea may be no more than a myth. and pete's correction protection plan. how a blue chip beverage stock could give stocks the pop they need. plus, playing the global credit crisis. from your couch? you can do it, find out tonight on america's post market show. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is.
12:57 pm
completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco.
12:58 pm
12:59 pm
welcome back to the halftime report." time to call the close. around the horn, brian? >> i think i'm going to be a buyer here and i think you have an opportunity to bite financials here. i think that bernanke news that he's going to raise the interest on reserves gives them more money and remember, it's the shape of the yield curve that matters, not the absolute value of interest rates. as long as there's a steep yield curve, you're doing well. >> good point. scott? >> i'm a buyer. i think that the bernanke news was overdone. the markets were thin this
1:00 pm
morning because so many people stayed home because of the weather. it's bounced back. this would ultimately be good news because we're giving the market more information. >> you're right about that. jared what, do you think? >> i'd be watching the close to make my decision but probably going to be a buyer. i'm examining teva and google going into tomorrow. >> google had announcements today. tim, what do you think. >> dollar's getting stronger because the u.s. economy is getting better. europe still has problems. tonight on the "fast money" we're going to talk about this council meeting. dollar's going higher. >> maybe an idea of let's bring money home, start putting it to work in the united states. that does it for us. we'll show you how to play the global credit crisis from your couch using etfs. >> we're watching the markets. still to come, the fed chief outlines his exit strategy, plus a whole lot more. management mess. sticking accelerators, broken gas pedals, signs of
1:01 pm
stonewalling the u.s. government all in the name of being number one. is it time to back away from the toyota way? and spice in the corner office. could your best buddy be a former cia agent? is he spying on you? a peek inside this multibillion dollar business practice. all that plus the ceo of a hotel chain whose stock is up 600% since the bottom and the reason why las vegas is saying thank you to the big easy. the second big payoff hour of "power lunch" starts right now. >> indeed if does. welcome to the second hour of "power lunch." i'm tyler math think son. bob carter telling phil lebeau electronics are absolutely not the problem with toyota's pedals. and cars are being fixed at the rate of 50,000 a day, a total of about 225,000 so far. >> i'm dennis kneale. google saying it's planning to deliver a broadband service on a trial basis to a number of cities providing a test bed for
1:02 pm
a next generation of products and possibly a challenge to cable and the tell cos. >> fed chairman ben bernanke outlining the exit strategy he will eventually em employ. steve liesman has more on the testimony that broke at 10:00. >> exit stage left and right all over the place. it was a significant speech on fed pol from the chairman. markets initially seemed spooked at the explanation of the exit strategy. it would happen sooner than they thought. on further review, you can see, investors seemed to take him at his word that no tightening of policy is imminent. here are the keys to what the fed chairman said. he's going to raise the discount rate before long. i think it may be the next meeting. it's now 25 basis points over fed funds. it used to be 100 over. that may be where eventually they go. the new kid on the block, we've talked about this before, the
1:03 pm
fed chairman finally saying it is not going to be fed funds. that's ot the object of their policy. it will be the interest they pay to keep the trillions of dollars of ares in the banking system on deposit at the fed. paying those reserves will keep the banks from lending it out. it may do something it hasn't done since the early '80s, target reserve balances. he went out of his way to say these changes do not signal a change in policy. he made a point of emphasizing the policy remains about where it was when the fed met in january pr it said the policy would be exceptionally low for an extended period. in addition to interest on excess reserves, he also talked about the issue of reverse repos saying we're looking for new counter parties. not just dealing with the primary dealers and maybe using mortgage backed sureties in those repos. certificates of deposits like cds you might get and the big question, will the fed sell assets. he said no, not in the near
1:04 pm
term. but never say never. here's the policy in the near term. the fed will let agency and mbs mature but will not replace them. treasury coz roll off, as could and the mortgage-backed securities will eventually be sold. >> if i could supersimplify this. we have hampton pearson. it is roughly 2:15 in the afternoon saying in this is what the fed fund's rate is. we're going to shift that to interest rates paid on reserves. >> retiree who have been upset that interest rates are so low because they wanted higher interest rates, if they raise fed funds, don't bank account interest rates go up. this other thing with interest paid on reserve deposits won't necessarily make bank accounts go higher. we've got the ten-year note auction results in. rick san tell little is here to give it a grade. everybody was watching to see what kind of demand this would get. >> who let the dogs out? this is a d, d for dog, "d" for
1:05 pm
not good. you know, it showed up in a yield of 3.692. you know, we weren't even really ever in the 3.69 camp in the whole wi trading maybe other than four days ago. so from a demand side not good. the bid to cover at 267, thank you peter for telling me the average. it was 2.75. so below there. we had a whopping, what was it, 13%, doug? my drexel come padre still on the floor. that's direct bids. those are the wrong guys buying it. yeah, no matter how you slice it a "d" and maybe in many ways this was affected by what's going on in europe because it's po not nearly as anxious there. >> any reaction on the news of what bernanke would have testified if he had been there in person in congress? >> i hate to be cynical and the discussions are great but they
1:06 pm
can talk about it till they're blue in the face. nobody in the world i live in believes they're going to pull anything out soon even if they snug up the discount rate at some point in the next several meetings, does it really have any teeth on it. >> they're going to do it eventually you know. >> do you think there's any chance the relation we've seen in the option today to do with bernanke's changes. >> the thing i was getting to before, this issue about they may let treasuries roll off, that's potentially significant, right, as a policy. we hadn't heard that before. the treasury rolls off and they replace it. they go out and buy another one. if they were to let them roll off, that would ultimately increase the total amount of treasuries that were out there. you would think that could spook some of the guys bidding on the ten-year now. that's a new strategy we didn't hear about. he says eventually we're taking the party bowl away and people need to be ready to do it. i feel like he wants the market to put a bid out there on the
1:07 pm
exit strategy and kind of wait and let's have a kind of back and forth between markets and the fed where the right levels. remember, the rate doesn't have to remain at zero or 25 points on the interests on reserves for them to remain accommodating. they can still be low in that environment if they were at 100 or 150. >> steve, thank you. rick, thank you. world stock markets trying to hold on to a recovery that was pinned on hopes for an eu bailout for debt-ridden greece. that remains in flux. will intervention help ease the problems or is it too large to contain at this point? in new york, john levy joins us. he thinks the situation in the eurozone will remain extremely volatile. on the phone is mark faber. he believes that a correction in the global markets is already under way. welcome, gentlemen. i'm going to start with you, if i could, john. there are also people out there who think even if greece does get some sort of rescue plan, that that does not mean that
1:08 pm
will contain june is off the table. that this is the tip of the iceberg and nel plan might complicate things for some of those other countries. do you agree or not. >> a rescue plan could be a complicating factor. in each and every eurozone country, it's going to be a rocky and drawnout process. if we see support, it's going to be in the form of a loan. that's going to be a very uneven process across the euro zone. >> mark, do you agree with that if the correction in the global markets is under way, how much more does it have to go? >> basically, most of the markets or stocks are down approximately 10 to 20% from the peak. some markets like the s&ps may be down only just 8 percent and others are down like 20% from the peak. but we are in a correction phase. and i would expect this correction phase to run further. now, it very near-term on a ten
1:09 pm
days basis, the markets are a bit oversold. we could get kind of a relieve rally. but i wouldn't think that in february we'll see a new high on the s&p and other markets on the s&p above 1150. in fact, i think the 1,100 level on the s&p is now quite a resistance zone. >> marc, would you buy greek debt right now? >> would i buy what? >> greek debt right now. >> no, i'm not interested in government or sovereign debts because i think that all governments will eventually defold, including the u.s. >> whoa, whoa. >> all governments, uh-huh. >> all governments. except some like singapore that have basically no government debt and have huge reserves. >> well, a lot of people. >> in general, the problem is the emerging economies today are financially much sounder in terms of tax to gdp than the
1:10 pm
developed world including the u.s., western europe, the uk and so for the. so i think the problem will that will be in the discrepancied world and let me explain why. in the developed world we have huge debts to gdp in terms of government debt to gdp and unfunded liabilities that will come due. and these unfunded liabilities are so huge that eventually, these governments will all have to print money before they defold. >> john, what's your reaction to that? we saw a big inflow into the u.s. dollar in a safety play. obviously the people going into that currency don't think the united states is going to default. >> i think if you look again at the sort of specifics of the question in europe and i think that that is a good area to keep focus on, there's a lot of adjustment that needs to take place here. as this process unfolds, we're going to see shifts in social models in the sort of fiscal structure and the sustainability issue is going to remain paramount.
1:11 pm
but i don't think it makes sense to sort of jump to a conclusion that this is a sort of perpetually unwinnable or situation that can't be subject to adjustment. it's going to be a drawnout process and we need to keep ta focus and keep attention to where those variables are and what that adjustment is going to look like and also keep in mind the sort of relative differential within those processes. >> mark, about your catastrophic outlook. you're the gloom, boom, and doom report. two out of the three are negative. were you selling this kind of panic in march before stocks rose 60% and did you miss out on that upsurge? >> actually, i have very good news for you. on march 6th, i was interviewed by bloomberg, sorry to say that and i said to buy stocks and since then, the doom gloom and boom report has been very positive about stocks. >> that's really good to hear. thanks very much. >> i'm so negative about government bonds and because i
1:12 pm
think that monization will continue, i'll relatively optimistic about stocks going up. they'll probably go up less than precious metals, but that's one of the safe havens. >> we've got to carry this on at another time. thanks very much. care fusion trading higher after beating the street with second quarter earnings and boosting guidance, the medical device device maker raised earnings outlook to the upper end of the range. shares up about 1%. here first on cnbc is the chairman and chief executive officer. nice to have you with us. >> thank you. >> you've had to digest some charges having to do with your split from cardinal health. are those now all behind you? >> well, the majority of the charges are behind us, and what we've done is focus on adjusted earnings and not include those charges so that the investment
1:13 pm
community can get a true picture of the underlying business. >> and that was a beat by what, a penny, if i'm recalling correctly. >> it was, it was. >> and you raised your guidance into the future. talk to me a little bit about political gridlock in washington with respect to health care. are you heartened that there's gridlock, frustrated by it? >> well, i think everyone is frustrated. i think the election in massachusetts indicated that the american people really want congress to focus on something other than health care at the moment. il support the basic tenants of health care reform but i very much worry about unintended consequences. >> for example? >> well, rising costs. >> but you're in an area where health care reform i would think would be favorable to you because you take, you are in the two sections of health care that the president has said he wants
1:14 pm
to improve on, medical errors and also hospital acquired infections. i mean those are two areas he has specifically said he thinks there can be improvement upon. that's a very important niche for you, is it not? >> that's absolutely right. that has been our focus for several years now, and what we see happening is that this plays into the need to remove cost from health care and improve the quality of care. and that really is what our focus has been. even though health care reform can play into care fusion's sweet spot, i still worry about unintended consequences for the nation as a whole. >> if -- and let's stipulate here that there are a lot of lawmakers who are watching right now. what would you say to them on health care about breaking -- if you want health care and you say you support it in principle, what would you tell them they need to do right now to break
1:15 pm
the frustrating log jam which you described? >> well, this is over 16% of our gdp and clearly, you can't overhaul something that substantial in a whirlwind fashion without making a large number of mistakes. so i would urge them to be very thoughtful and to think this thing through and to actually go at it on a much more incremental basis. >> mr. schlottebeck, thank you very much. >> you're very welcome. >> we'll have you back soon. >> all right, it may be tough times in the travel business and, of course, it is. but windham worldwide, the stock up almost 600% from the bottom. they tripled dividend. we're going to talk earnings and more with the ceo. >> take a look at that live shot of new york city. what is that? >> i think that's a close-up of a snowball. >> from the top of the rock
1:16 pm
looking down at parts of new york city, and we have blizzard-like conditions in our neck of the woods in new york city. >> windshield wiper would be good. >> there we go. >> that's times square. >> not even sticking. >> we're back in a moment. here's a look at some of the nyse actives. a number of them trading in the green today, including citigroup, bank of america and ge, the parent company of our network.
1:17 pm
1:18 pm
1:19 pm
take a look at the dow jones industrial average. we were just positive a second ago. we're seeing a bit of volatility here at the 1:00 hour. part of the issue that we're seeing stocks getting just a little bit more positive here is the dollar pairg back some of its gains. you can see there the s&p right now is just fractionally positive. the strength coming from the financials on the back of the bernanke speech today, financials have performed very well. mason came out with assets in january. they slipped a little bit but the stock performing well today. american express one of the ones that turned positive. jpmorgan positive all day. with the snow, a lot of traders hearing folks saying they're looking to head home early. interestingly, the supermarkets have been doing gangbusters
1:20 pm
because a lot of folks have been out there stocking up on food ahead of these storm warnings. the couch potato trade is alive and well, as well. kraft, sarah lee and campbell's soup, folks got to eat when they're home. back to you, dennis. >> thanks very much. wyndham worldwide swings to a profit and triples its dividend turning in a fourth quarter profit 40 cents a seat, beneath the street by three cents. same period a year ago, lost $1.3 billion. $7.63 a share. revenue group from like 913 million versus 911 million last year. shares up almost 6% today. let's bring in the chairman/ceo stephen holmes. i'm going to start with a really unkind question. you just tripled your dividend right at a time when the bush tax cuts are going to expire by year end and dividend tax rates will actually go up. couldn't you do something better with your money? >> it's a great question but
1:21 pm
it's a question of where you're going to allocate resources. we have 500 to $600 million of cash flow for the foreseeable future annually. we've got to deploy that cash flow to invest in our businesses to grow our businesses. but we also want to return some of it to the shareholders. so increasing the dividend gets us up to about a 2% yield and we're going to be buying back stock also. >> you're doing that instead of building more hotels in more places, right. >> we don't build the hotels. we franchise the hotels. we own the brand names and we have 700,000 hotels part of our systems. >> 76% of your revenues u.s. talk about the u.s. economy for a minute. had i been optimistic for a great recovery. i think people are underestimating the rebound. lately i'm worried that the second half is going to be rougher than we think. what are your income. >> we're assuming it's going to be a more gradual recovery personally. that's the way we're running the
1:22 pm
business, assuming it's going to be gradual. we'll see improvement to the second half of the year. comparisons will get easier for everybody. towards the ends of 2009, the world was pretty bleak. we'll get to a world of better comparisons. >> what threatens that potential recovery is, the biggest worry for you? >> the biggest worry is really that we can't do something to spur employment. you know, continuing unemployment problems, continuing sagging of consumer confidence, those are fundamental. we need those to break and then in addition, we also need the credit markets to remain stable. >> some business people say we're afraid to invest. the outlook's too uncertain with obama care with, tax increases. do you feel like the outlook is too uncertain for you to make big decisions? are you holding back on certain decisions? >> we're not. coming out and tripping our dividend is at the same time we feel very confident our cash flow and ability to deliver on expectations. no, we went through a rough time in 2009 as all companies did. we came through it in great shape.
1:23 pm
we're in very strong financial shape. we're feeling good. >> we're doing a lot about the fact that there are these rio tinto executive boards in china going to be ross acuted for bribery charges. have you hotels in china but doing business in china when we see all this talk of corporate espionage on the part of the government, do you have any concerns? >> whefr you go outside of the u.s. and dealing in foreign countries, you have to make sure you're following all the rules and know, playing by all the regulations that are in place. so we are very diligent on it. we have a very extensive integrity program that talks about foreign corrupt practices, making sure we're in line. so do i worry about it? of course, i worry about everything. the fact is, we are very diligent on that and very careful the way we conduct business. >> thanks very much for being with us. >> all right, dennis and michelle, thank you. >> it was a pleasure. >> tyler? >> up next, hedge funds and corporate spies, blue chip banks and cia agents. this is not a novel or a movie. it's the real thing.
1:24 pm
we will take you inside the secret world of business espionage. >> and in just a few moments, toyota was all about quality control. now they're all about recalls. how did the company lose its way? we will talk about that. "power lunch" is back in a flash.
1:25 pm
1:26 pm
dallas federal reserve board president richard fisher warning politicizing is an the fed represents a significant risk telling a dallas audience at this hour while the fed is not blameless in the financial crisis, the current structure works and that politics should not be put into the mix. he says the fed has always been subject to the appropriate oversight. >> on wall street, traders are always looking for ways to
1:27 pm
corner the market and some have gone as far as to hire bona fide spies to teach them tricks of the trade. picture cia agents working at hedge funds and blue chip banks. we're talking the secret world of corporate espionage as told by eamon javers as told in his new book. congratulations on the book. >> come on, are you kidding me? these people are hiring for spies? give me an example. >> right off the bat, talk about sac capital, an enormous hedge fund. your viewers know it really well. i reveal in the book that sac capital has in the past hired veteran cia interrogators to come into sac's offices in connecticut and train its hedge fund managers in interrogation techniques, psychological profiling and the things these cia veterans know how to spot a liar. it's the art of deception detection. and they deploy that on corporate earnings calls looking to find when a ceo is really
1:28 pm
uncomfortable with his earnings, he's hedging his bets, not really telling the whole truth, with he this had when they hear that on an earnings call, they can tell their clients, the hedge fund folks they ought to get a little more specific there. >> there are probably ceos whom analysts would love to put on a water board but that's not the point here. but are these actually currently employed cia agent oz or former people from the company. >> you definitely get former people. in several cases i know of current cia officer who's went to work for a hedge fund and financial consulting firm in boston called business intelligence advisers or bia. bia says they don't hire active duty cia guys anymore. they've done it in the past. but the cia has a little policy allowing people to moonlight. >> are you kidding me in the cia agent can double dip? the taxpayer can pay his or her bills and be on the payroll of a hedge fund.
1:29 pm
>> that's right. the cia has a little known policy where they allow their agents to work nights, weekends in the private sector picking up a little extra cash. they will do it because people in the cia are hurting for cash. they don't make all that much money. they want to let them make more money. it's a retention thing to keep the people from jumping to the private sector where they can make a lot more money. >> you bet they could than working there. you just said that bi a, the company in boston that was one of the leaders in this intelligence, they don't em employ the current cia guys anymore. is that because they were afraid of conflicts of interest or what? >> they say it's not something they've done in some time. i know they've done it in the past. active duty people have worked there. that's a firm that works for fej hnds, financial institutions and others trying to get an edge. as you guys know, information is king. if you can get information in the market, a minute or two, a couple minutes a day before
1:30 pm
competitors, you win big-time. >> and it seems like the cia is missing a profit center here. they should start selling consulting services to business. >> they can pay for all the predator drones. >> to your point, it was during the civil war i think a lot of, not necessarily wall street firms but financiers had spies down on the battlefields because the price of gold would move depending on the result and often time, new york financiers knew the answers from the battlefield sooner than washington did. >> i write in my book, there's a great history here and some of the great telegraph scams that happened where guys scam artists would get access to the telegraph room and transmit fake news to wall street about ships sinking with commodities on them and things like that and they would arbitrage the difference and make a fortune. they had to hold somebody at gunpoint to do did. >> is there any chance there will be repercussions when they read the book in washington. >> bingo. >> it's another reason for the
1:31 pm
administration and or congress and or those in washington to target wall street, is it not? >> well, it would seem to be. i mean, we broke this story about the cia's policy on moonlighting in last week out of the book and immediately, the intelligence committees on capitol hill said they were going to investigate it. the director of national intelligence was up on capitol hill last week. he was asked about this. he said that the policy that the cia has is important. it's caveated. they have to get an probable. there are forms they have to fill out. but he's going to report back to congress. there might be more to come. >> you have a book that changes policy. every journalist's dream. good luck. his new book "broker trader lawyer spy, the secret world of corporate espionage." >> from corporate espionage to corporate crime, with the one-year anniversary of the allen stanford scandal approaching, scott cohn takes a look how the government may have bungled the case for years. >> tyler, remember allen sandord
1:32 pm
wouldn't say whether he worked for the cia. who can forget how defiant he was. >> all i can tell you is that allen stanford has run no ponzi scream, has set out to defraud no one. allen stanford has worked his behind off for 25 years to build a credible, real, solid, solvent group of companies. >> it is a much different allen stanford now. here's how he looked in december. held without bail since his indictment in june. that suits investors just fine but they're more angry at regulators. the sec first got winds of potential problems at stanford in 1999. that's earlier than previously disclosed. the agency didn't start an investigation formally until 2005. finra, the self-regulatory arms acknowledges it misread flags going back to 2003 and state regulators in texas, louisiana and florida did no better. angie shaw lost $2 million
1:33 pm
invested with stanford and now heads the victims coalition. >> it's just not possible that they were that will incompetent for 25 years. >> so if they weren't incompetent, what could it be? >> someone along the way made the decision to let him continue on. >> so how did it all stay secret so long? watch our new documentary "more secrets of the knight," 10:00 eastern tonight on cnbc with extras at >> looks great. thank you. >> still ahead, matt nesto has got the stocks that are off the radar but on the move. we go live to the big board with the prescient steve grass oo, his forecast for the rest of the day's action. >> off the charts. could be a tough year for the markets. but citi thinks small and mid caps are the place to be. we're all backing in two minutes on "power lunch." believe it or not, is this the white house?
1:34 pm
well, it's their somewhere. trust us. there's a live picture of washington, d.c. and the blizzard continues. you can barely see it through there. they're getting another 6 to 12 inches down there. we're back in a moment. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio,
1:35 pm
wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here.
1:36 pm
1:37 pm
welcome back to the most powerful lunch in business. here are some of the stories we're following at this hour., top of the nasdaq after the internet giant beat expectations for the fourth quarter. hitting a fresh 52 week high. aig leading the s&p 500 today. adding more than 8%. who would have thunk it. and u.s. soybean, corn, wheat futures all rise and more than 1% on a weaker dollar. >> and for more on today's market, it's in the green in the dow. let's go down to the floor of the new york stock exchange and join steve grasso of stewart frankel. they turned it around a little bit. a big eu summit meeting will be going on. the market seems to have a slightly better tone. >> i think the main concern was the sovereign debt issues. and i think dennis just touched on it right there the aig news. aig is up, the news that kind of fell through the cracks
1:38 pm
yesterday was metlife taking a piece of aig. that's very positive on a macro level for the market. >> all right. >> all that's the market's concerned with is seven debt. think how we got to this level. i'm checking to see where we are in the s&p. if you see where we drifted down, we drifted down to the 1085 level in the s&p before sovereign debt was arab. we should be able to get back to there. if you had to pull out a green chute we're at 1072 in the s&p, maybe we can rally to 1085, but there's still a lot of unknowns in this marketplace. >> all right. so if they don't come to an agreement amenable to the market in terms of greece debt? are all bets off or has the market figured out that maybe we can isolate the situation with greece? >> i think the market, can we isolate it. >> i don't know if we can isolate it but i had i we will drift down to the 1044 level in the s&p and probably test that again and then obviously, if that doesn't hold it, opens the door to 1,000 in the s&p.
1:39 pm
so i think the bigger issue is we'd like to see this market rally and see it rally aggressively. but until we get above 1100 in the s&p to 1121, i think you really have to trade this market versus invest it. >> so you're on the sidelines? >> i trade every day. i think for the retail investor, that's looking to put some money to work in his retirement, if you want to put in 20%, 25%, of what you want to allocate, that's never a bad idea. i wouldn't go all-in at these levels because i see further risk to the downside in the s&p. >> okay, thanks, steve. appreciate it. >> have a good day. >> every day at this time, we go beyond the usual suspects. find you smaller names that are big movers. today matt has been kiping tabs on what's off the charts. >> some doozis. affiliated managers group, amg, big bang for the buck. they spent $1775 million this morning buying pantheon, a private equity fund of funds. they paid cash for the deal. and then just a few hours later
1:40 pm
they said our 2010 guide assumptions going up by about 10% and the stock up by about 10%. number one stock in the mid caps and in the russell. a 10% short interest might have some investors scare there had today. there you go. they have 30 give or steak stakes in these different boutique investment firms and $250 billion in assets. prides crossing, mass, love it. heavy selling going on. the executive board, almost an eight-bagger on the volume here today, down 7%. the worst stock in the mid caps. their fourth quarter results better than expected but full-year forecast way, way light. their best practices are our business, 80% of the fortune 500 companies use them as a consultant and lastly and quickly, net gear at a two-year high. 900% of the average volume here today with 2.6 million shares traded of net gear. they make net gear. the best named company.
1:41 pm
they do what they are, ntgr is the ticker. they sell it to businesses and to people and there you go. san jose. >> maybe with google's big broadband rollout they're a big buyer. matt, thank you. tiler? >> our next guest expects small and mid caps to power through 2010 with gains of 10% in the russell 2000, that index up more than 70% since the lows recently seeing a closing high of 649 in january. right now at 596. joining us now is lori calvasena, strategist for citi. my first question is, after you've had gains like that, i always get very worried that will a pullback like the one we're in is going to endure for a while longer. tell me why that's not the case. >> one thing we've seen over the past year, year and a half is technicals have been important for understanding where the small cap index runs into trouble and where it stops having troubles. my worst case scenario right now for this downturn is maybe a
1:42 pm
move to 550, another 5, 6% on the russell 2000. either way, whether we're bottoming now or have more to go, i'm convinced this market is going to take the small caps up pretty strongly with it. >> steve grasso a moment ago said he didn't feel like this was the time to commit a ton of cash because, like you, you sees the possibility of a further decline. if i had, lets say, $100,000 in incremental cash looking for a home, how would you put it to work in small caps over, let's say, the next 1 months? >> i won't get into specific allocations but the three sectors i like best within the small caps space right now are health care, industrials which we call producer durables and also certain parts of technology. just quickly on the industrials and the health care stocks, we're seeing a lot of m & a chatner that space. that's going to be a huge driver of the small and mid cap indices this year. we see really, really cheap
1:43 pm
valuations. those are the two best valuation stories in small cap right now. within technology, you have to be very selective. the semi semi cap equipment space looks very expensive to us, but other areas like software and services we're coming to an intriguing valuation opportunity. one thing i would absolutely avoid is materials. those stocks looked extremely overvalued in small and mid cap coming into this latest correction and what we've seen so far this big drop that we've had, we haven't made a dent in those expense valuations. >> like you, you express an opinion very clearly. thank you very much well done. >> coming up next, the toyota way. for years that meant quality, control, catering to the customer. now it means defects and recalls. how did the world's biggest automaker forget its own lessons and lose its way. >> let's look at dow leaders as the dow wobbles between positive and negative territory. right now down 212. that's the boiling point. jpmorgan chase is higher however. so are the bank of america,
1:44 pm
general electric and american express. financials there you could say. and there is times square. new york, washington, philly, baltimore, new york doesn't look that bad, does it. >> it doesn't look that bad in times square. >> just come to new jersey, folks. >> come to new jersey. you'll see a lot of snow. >> you'll see a lot of things in new jersey.
1:45 pm
right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. 154 are tracking shipments on a train. 33 are iming on a ferry. and 1300 are secretly checking email on vacation. that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. right now get a free 3g/4g device for your laptop. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access  host: could switching too device for your laptop. 15% or more on car insurance? host: is ed "too tall" jones too tall?
1:46 pm
host: could switching to geico 15% or more on car insurance? host: does a ten-pound bag of flour make a really big biscuit? welcome back to "power lunch." i'm phil lebeau live at the chicago auto show where two days of media days for the automakers to show the latest models are overshadows by questions about toyota and its latest recalls. that's all reporters want to talk about at the auto show.
1:47 pm
when they had a chance to talk with bob carter about the recalls he indicated the company is fixing about 50,000 gas pedals a day. he estimates they have roughly 60,000 new models that were on the show room floor that still need to be repaired. during his press conference, i asked him point blank, can you categorically say electronics are not the problem with the gad pedals. >> yes, yes. we have spent years thoroughly developing these and exhaustively testing them. we have companies outside of toyota that is independently testing them, have tested them in the past and externally testing them today. we have no indication whatsoever that anything can happen that would even directly indicate that that could potentially cause independence acceleration. >> as you take a look at shares of toyota under immense pressure the last month, keep this in mind. there is continued discussion in
1:48 pm
washington about two things, one, what did toyota know and when? also, the federal government, the national highway traffic safety administration, how come it didn't come down harder on toyota. in the hearings in two weeks, there are some calling for akio toy ohda, the president of the company, to testify at the hearings in a couple weeks. tyler, this continues to swirl around, questions about toyota and its history of problems when it comes to the gas pedal. >> congressman issa has invited him to testify. stay there as we bring in two experts to discuss whether toyota has lost its way. you know cnbc contributor jeff sonnen feld and jeffrey liker from the university of michigan. and the author of "the toyota way." professor liker, let me begin by asking, do you think toyota really has lost its way? if so, why? >> okay, well, first of all, i don't have any evidence that
1:49 pm
they have. i've been in the manufacturing plants. i've been in their design offices like in the just last year and toyota is alive and well in what i see. i also have been trying to understand the data to understand if there's a particular problem with toyota compared to other automakers. in the last decade, toyota's had almost the least number of customer complaints of any automaker. they had 9% of the complaints filed with the national highway transportation safety association. and they make up 13.5% of the cars on market. >> that was then. this is now and now they're certainly having complaints and serious safety issues. >> that was till december. then was as of december. it was as of one month ago. i'm not talking about ancient history. now what's different really is the recalls. cars like the prius, the 2010 prius that normally like in the case of ford with the fusion have been handled with a technical notice there being handled by toyota because of pressure on toyota with a recall
1:50 pm
notice. so i think part of what's happened in the difference in standards, what was a technical bulletin is now a recall. and that's actually up for the entire industry last year compared to the year before. >> jensonen feld, i'm thinking you're going to be a little more blunt in your assessment of whether toyota has lost its way. >> thanks, dennis. i would differ from professor liker although he is an auto industry expert and i'm not. it's like guidance systems. used to argue about the safety of their pacemakers versus medtronic that was quieter but much safer. it turns out they had been suppressing thousands of greempbs along the way to regulators. nhtsa looks like they've had some not overtly conspiratorial but a suppression from the public of a tidal wave of thousand of, just today's "wall street journal" alone accounts for what's been going on for about a decade of failures having to do with corroding oil thanks. >> i looked at that.
1:51 pm
when you've sold, they recalled 8 million cars. they had a couple of thousand complaints. it's hard to figure out when you go for an 8 million recall. isn't it? >> and right now, we're testing the come tparable u.s. makes. they're not having the same problems. there was a spike in the problem when they moved to an electronic system from the mechanical throttle. hopefully that is just coincidental. surely they've had all the other explanations, the carpets this or that that 8.5 million vehicles, way more than the entire production last year now recalled. problems in europe they hid from the u.s. when they're trying to fix the problem in europe with the exact same mechanical system here in the usa and don't tell us about it. >> i want to bring in phil lebeau. fib me for interrupting you sir. phil, has toyota's culture of secrecy been part of its problem here? >> i don't know if it's so much of secrecy. it's the company wanting to study the problem before coming out and saying there is a
1:52 pm
problem. that's at the root of the problem when it comes to national highway traffic safety administration back if december saying we think there's a further issue with your sticking gas pedals. you need to address it immediately. instead of back in december saying you're right, the company took the tone of, we're still going to study this. it wasn't till january when the d.o.t. was even more forceful and said either you do something or we will do it for you, that toyota was essentially forced to make that decision. so, whether you call it a culture of secrecy or a culture of we're going to study the problem to better understand exactly what's going on, that's at the heart of what we're discussing here. >> thank you very much. mr. liker, real quick, housekeeping here. the toyota way, did toyota pay you in any way? how did you get paid for that book and how much did they cooperate? >> they haven't given me any money for the book, but they cooperate, they've been cooperating with me for the last 25 years. i've learned a ton and shared what i've learned with hospitals
1:53 pm
and companies throughout the world. >> do you think they'll emerge from this in unscathed or forever damages? >> no the damage is serious because of the public, because of the media coverage right now and congressional hearings and it will take awhile. it's going to take years. it's going to take several years. >> jeff, we're going to let your nodding head back and forth be as obvious evidence of your skepticism. >> it became cost cutting rather than quality. that's what changed. >> thank you. >> coming up, is this the double dip? home prices were getting better, fourth quarter numbers putting a damper on the turn around. darn it. diana olick has the details. >> a turnaround on wall street should make you happy. we're on the upside. we're off our best levels of the day but we're in the green. up above seven points on the dow jones industrial average.
1:54 pm
1:55 pm
1:56 pm
welcome back to power lunch. i'm diana olick in washington. we expected it and it's here. the double dip in home prices after prices increased for nearly half of last year, a good chunk of the nation's housing marks are seeing flattening or can decreases in q4. a new report shows cities like boston, atlanta, san diego, denver all saw appreciation in mid 2009 and began dipping again
1:57 pm
toward the end of the year. san diego, basically flat after seeing gains. 29 of the 143 moorkts is saw price flattening or declines in q4 of '09. 29 markets including los angeles, new york, and philly increased on a month to month basis throughout q4 but have slowed down in the rate of appreciation. zillow's chief economist saying we saw a respite from a larger market correction that has not yet run its course. we're sitting tight for the second consecutive quarter with right around 21% of borrowers in a negative equity position. no movement due to the double dip. why did this happen? thank government intervention in the form of the first time heim buyer tax credit as the government phases out and market fundamentals come back into play, there's probably a bit more pain before we see the gain. tiler? >> springtime, the big house hunting season. diana, thank you. folks in las vegas saying who
1:58 pm
dat to the new orleans saints. the nevada gaming control board reporting casinos won nearly $7 million on the super bowl. a little over 100,000 more than last year. vegas always wins. over $82 million were wagered in vegas on the big game. recession, what recession out there and certainly not on bourbon street. how much was wagered without the casinos? a bet you billions. >> the smallest. >> in offices. >> we had like two pools in here already. >> have a great time at the olympics. >> i'm off to vancouver. see you live there friday. >> we will miss you. thanks for watching. we will see you tomorrow. "street signs" is next. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online,
1:59 pm
in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here. as you can see, this isn't your typical midwestern farm. the reason lies six thousand miles away... in japan, where a producer of specialty eggs needed corn for feed... grown to precise standards. cargill identified the producer's needs, then introduced an illinois farmer to grow the exact corn needed... and developed a system to ship it separately, connecting the farmer with a japanese customer... who was very appreciative. this is how cargill works with customers. what are you doing...? calling chase sapphire, seeing if we have enough points to stay longer.


info Stream Only

Uploaded by TV Archive on